How this CEO secured a $250,000 'Shark Tank' deal with Chris Sacca after all 5 investors had already turned her down

In seven seasons of "Shark Tank," every time an entrepreneur
has made a last ditch effort to secure a deal after all five
investors have bowed out it usually ends up being awkward
and embarrassing.

But in the latest episode of the reality pitch show, instead of
getting
harassed out of the Tank by Mr. Wonderful as she plead for
money, Hatch Baby
cofounder and CEO Ann Crady Weiss laid out a carefully
constructed alternate plan that the investors were willing to
hear out.

It was a great demonstration of the effectiveness of prepared
negotiation strategies delivered with utmost confidence. "Who
knows if it was entrepreneur virus (unfailing belief!) — but it
worked," Weiss told Business Insider.

Weiss and her husband/cofounder/CTO, David, entered the Tank
looking for $250,000 in exchange for 2.5% of their pre-launch
"smart" baby accessory company. Hatch Baby's premiere product is
an electronic changing pad with a built-in scale that can be
linked to a smartphone app.

Parents of infants can keep track of their child's weight,
length, and frequency of diaper changes. The scale is sensitive
enough to weigh how much breast milk or formula a baby consumed
in a sitting through a comparison of before-and-after weighings,
one of the primary features that compelled Weiss and her husband
to create the product.

Before committing fully to Hatch Baby in 2014, the Palo
Alto-based parents of three left executive-level jobs at BabyCenter, Johnson &
Johnson's independently operated online resource center read by
35 million parents around the world each month. Weiss joined the
site in 2007 when she sold her social network Maya's Mom to
BabyCenter for an undisclosed amount.

"So you've got great experience. You've sold me on that,"
investor Robert Herjavec told the cofounders in the Tank. But he
and the other investors needed convincing that a pre-launch
company with no sales was worth $10 million, especially when they
consider the $299 price tag of the changing pad to be above too
many budgets.

Weiss explained that the valuation was based off an upcoming
Series A round of fundraising, following a seed round in
September 2014, where Hatch Baby raised $1.7 million as a
convertible note, meaning the money was a loan that
would convert to equity at a valuation set at a later time. The
cofounders also said their experience in the industry proved to
them that in a market where parents will shell out $500 for a
stroller, a $300 advanced changing pad is not a long shot.

Parents can use the Hatch
Baby changing pad to monitor their baby's
health.Hatch Baby

The Sharks were still wary of making an investment at such a high
valuation before a proof of concept, and all five pulled out of a
deal.

In the beat where the cofounders would say "thanks" and walk out,
Weiss told the investors, "I'm so sorry to hear that, but I do
want to take one more shot." She said that she was certain she
could raise the money elsewhere, but she wanted a
Shark since they are typically more hands-on than
average investors.

She jumped into a second offer: There was $250,000 left on the
convertible note from last September, and so she could bring a
Shark on under those terms, which included a $7.5 million cap on
valuation. That means that the investor would give Hatch Baby
$250,000 as a loan that would eventually be converted to a
minimum of 3.3% equity.

Weiss said later that she didn't think of this on the fly.
"We'd definitely planned the second offer," she said. "Given what
we'd seen on earlier shows, we knew the $10 million valuation we
started with would be a very tough sell. I worried they might
berate us and laugh us out of there — and I didn't eat or sleep
well for days because of it."

Sacca, who had expressed his interest to Weiss in the potential
for Hatch Baby becoming a leader in "smart" baby products that
could help parents monitor their infant's health and track their
growth, decided that under those new terms he'd be willing to
take a bet on the company.

Weiss said that even though the footage didn't make the aired
episode, Sacca was further swayed by her and her husband's
explanation of how True
Ventures, whose portfolio includes success stories like Blue
Bottle Coffee and Fitbit, was going to be involved in an upcoming
Series A round; following the segment's filming last June, True
Ventures led a $7 million Series A in October.

Sacca said that he has invested again in Hatch Baby since
filming, and while he could not yet disclose the terms, he told
Business Insider "it was a healthy markup from my initial
investment" and that he's "bullish" on the company and feels
lucky to be invested so early.

Neither Weiss nor Sacca would comment on whether the company was
meeting its initial goal of 20,000 units sold in its first year
of launch, but Sacca said it had a successful launch last October
and is building off "Shark Tank" momentum in the past week.

"The reviews are strong and the sales kept accelerating even
before 'Shark Tank' aired," he said. "2016 is going to be a huge
year for Hatch Baby."